January 07, 2007

Phony Hedge Funds Do Not Pay

-- By Pushpa Sathish, Staff Writer

Setting up a fake hedge fund, passing yourself off as the heir to Turkish business magnates, flaunting your largesse with a $1.25 million endowment to the New York University, using investors’ money to fund the gift, using the publicity generated to attract new investors, and finally being arrested while attempting to pass spurious checks at three banks in an effort to pay off furious investors – this sums up the infamous fame of the then 20-year-old Hakan Yalincak.

The founder of the Daedalus Relative Value Fund, who was released after cooling his heels in the slammer for twenty months, is still not home free; he faces a trial on February 14. He had to pay $1.1 million in cash bonds and promissory notes for his short freedom, during which he will live under house arrest, with a guard and wearing an electronic monitor. Yalincak and his family members also had to surrender their Turkish passports to ensure that he wouldn’t leave the country under the cover of darkness.

More arrests are due, said Yalincak, who is apparently co-operating with federal investigators to bring the other crooks to book. And if one were to believe Bernard Grossberg, Yalincak’s lawyer, the lad had nothing at all to do with the whole scam, and was just a mere tool used by the real masterminds.

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